News

Burger King settles lawsuit with franchisees

April 17, 2011

After a year and a half battle over value meal pricing, Burger King Corp. and the National Franchisee Association (NFA) have reached a mutual agreement to end its lawsuit.

The NFA filed its lawsuit in November 2009 on behalf of owners of Burger King restaurants in the United States concerning BK Corp.'s "maximum pricing" policy.

The lawsuit alleged that BKC violated the terms of the parties' franchise agreements by purporting to mandate maximum prices for certain products, even though the franchise agreements do not grant BKC the right to set prices. At issue was the company's decision to price its Double Cheeseburger for $1, a price point franchisees voted against on several occasions.

The lawsuit was filed in the U.S. District Court for the Southern District of Florida. Specifically, the NFA asked the court to declare that "BKC does not have the authority under the Franchise Agreements to dictate maximum prices."

Rather than continue to litigate this issue before the court, BKC, the NFA and the franchisee litigants mutually decided to end the litigation and BKC will be issuing a new systemwide policy for making BK Value Menu decisions.

Each side will pay its own legal costs.

The NFA consists of 19 regional franchisee associations, represents more than 80 percent of U.S. franchised Burger King restaurants and serves as the official voice of the BKC franchisee community.

Burger King released a statement about the agreement today:

"With the issuance of the new policy and the dismissal of the lawsuit, BKC, the NFA and the franchisee litigants now look forward to building a stronger and more collaborative relationship."